EXHIBIT 10.4


 


OFFICEMAX
INCORPORATED


 


2005 DIRECTORS
DEFERRED COMPENSATION PLAN


 


(Effective January 1,
2005)


 





















 


OFFICEMAX
INCORPORATED


2005 DIRECTORS
DEFERRED COMPENSATION PLAN


 


1.                                       Purpose
of the Plan.  The purpose of the OfficeMax
Incorporated 2005 Directors Deferred Compensation Plan (the “Plan”) is to
further the growth and development of OfficeMax Incorporated (the “Company”) by
providing nonemployee directors of the Company the opportunity to defer all or
a portion of their cash compensation and thereby encourage their productive
efforts on behalf of the Company.  The
Plan is an unfunded plan intended to provide Participants with an opportunity
to supplement their retirement income through deferral of current compensation.


 


2.                                       Definitions.


 


2.1                                 Change
in Control.  A Change in Control
shall be deemed to have occurred if:


 


(a)                                  Any
Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 25% or more of either the then
outstanding shares of common stock of the Company or the combined voting power
of the Company’s then outstanding securities; provided, however, if such Person
acquires securities directly from the Company, such securities shall not be
included unless such Person acquires additional securities which, when added to
the securities acquired directly from the Company, exceed 25% of the Company’s
then outstanding shares of common stock or the combined voting power of the
Company’s then outstanding securities; and provided further that any acquisition
of securities by any Person in connection with a transaction described in Section 2.1(c)(i)
shall not be deemed to be a Change in Control of the Company; or


 


(b)                                 The
following individuals cease for any reason to constitute at least a majority of
the number of directors then serving: 
individuals who, on the date hereof, constitute the Board and any new
director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination for election
by the Company’s stockholders was approved by a vote of at least 2/3rds of the
directors then still in office who either were directors on the date hereof or
whose appointment, election, or nomination for election was previously so
approved (the “Continuing Directors”); or


 


(c)                                  The
consummation of a merger or consolidation of the Company (or any direct or indirect
subsidiary of the Company) with any other corporation other than (i) a merger
or consolidation which would result in both (a) Continuing Directors
continuing to constitute at least a majority of the number of directors of the
combined entity immediately following consummation of such merger or
consolidation, and (b) the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity or any


 


1





















 


parent thereof) more than
50% of the combined voting power of the voting securities of the Company or
such surviving entity or any parent thereof outstanding immediately after such
merger or consolidation, or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which
no Person is or becomes the Beneficial Owner, directly or indirectly, of securities
of the Company representing 25% or more of either the then outstanding shares
of common stock of the Company or the combined voting power of the Company’s
then outstanding securities; provided that securities acquired directly from
the Company shall not be included unless the Person acquires additional
securities which, when added to the securities acquired directly from the
Company, exceed 25% of the Company’s then outstanding shares of common stock or
the combined voting power of the Company’s then outstanding securities; and
provided further that any acquisition of securities by any Person in connection
with a transaction described in Section 2.1(c)(i) shall not be deemed to
be a Change in Control of the Company; or


 


(d)                                 The
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or the consummation of an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets,
other than a sale or disposition by the Company of all or substantially all of
the Company’s assets to an entity, more than 50% of the combined voting power
of the voting securities of which are owned by Persons in substantially the
same proportions as their ownership of the Company immediately prior to such sale.


 


A transaction described
in Section 2.1(c) which is not a Change in Control of the Company solely
due to the operation of Subsection 2.1(c)(i)(a) will nevertheless
constitute a Change in Control of the Company if the Board determines, prior to
the consummation of the transaction, that there is not a reasonable assurance
that, for at least two years following the consummation of the transaction, at
least a majority of the members of the board of directors of the surviving
entity or any parent will continue to consist of Continuing Directors and
individuals whose election or nomination for election by the shareholders of
the surviving entity or any parent would be approved by a vote of at least
two-thirds of the Continuing Directors and individuals whose election or
nomination for election has previously been so approved.


 


For purposes of this
Section, “Beneficial Owner” shall have the meaning set forth in Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).


 


For purposes of this
Section, “Person” shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that “Person” shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its subsidiaries, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities, (iv)
a corporation owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company, or (v) an individual, entity or group that is permitted to and does
report its beneficial ownership of securities of the Company on Schedule 13G
under the Exchange Act (or any successor schedule), provided that if the


 


2





















 


individual, entity or
group later becomes required to or does report its ownership of Company
securities on Schedule 13D under the Exchange Act (or any successor
schedule), then the individual, person or group shall be deemed to be a Person
as of the first date on which the individual, person or group becomes required
to or does report its ownership on Schedule 13D.


 


2.2                                 Committee.  The Executive Compensation Committee of the
Company’s Board of Directors or any successor to the Committee.


 


2.3                                 Compensation.  A Participant’s fees, payable in cash, for
services rendered by a Participant as a Director of the Company during a
calendar year.  Compensation shall not
include any amounts paid by the Company to a Participant that are not strictly
in consideration for personal services, such as expense reimbursements.


 


2.4                                 Deferred
Account.  The record maintained by
the Company for each Participant of the cumulative amount of
(a) Compensation deferred pursuant to this Plan plus (b) imputed
gains or losses on those amounts accrued as provided in Section 4.6.


 


2.5                                 Deferred
Compensation Agreement.  A written
agreement between a Participant and the Company in substantially the form set
forth in Appendix A, whereby a Participant agrees to defer a portion of
his or her Compensation and the Company agrees to make benefit payments in
accordance with the provisions of the Plan.


 


2.6                                 Deferred
Compensation and Benefits Trust.  The
irrevocable trust (the “DCB Trust”) established by the Company with an
independent trustee for the benefit of persons entitled to receive payments or
benefits hereunder, the assets of which will be subject to claims of the Company’s
creditors in the event of bankruptcy or insolvency.


 


2.7                                 Director.  An individual who is not an employee of the
Company and who is a member of the Board of Directors of the Company.


 


2.8                                 Normal
Retirement Date.  The date specified
in the Company’s Bylaws for the retirement of any Director.


 


2.9                                 Participant.  A Director who has entered into a written
Deferred Compensation Agreement with the Company in accordance with the
provisions of the Plan.


 


2.10                           Termination.  The Participant’s ceasing to be a Director of
the Company for any reason whatsoever, whether voluntarily or involuntarily,
including by reason of early retirement, normal retirement, or death.


 


3.                                       Administration
and Interpretation.  The Committee
shall have final discretion, responsibility, and authority to administer and
interpret the Plan.  This includes the
discretion and authority to determine all questions of fact, eligibility, or
benefits relating to the Plan.  The
Committee may also adopt any rules it deems


 


3





















 


necessary to administer
the Plan.  The Committee’s
responsibilities for administration and interpretation of the Plan shall be
exercised by employees of the Company or its subsidiaries who have been
assigned those responsibilities by management. 
Any employee exercising responsibilities relating to the Plan in
accordance with this section shall be deemed to have been delegated the
discretionary authority vested in the Committee with respect to those
responsibilities, unless limited in writing by the Committee.  Any Participant may appeal any action or
decision of these employees to the Company’s General Counsel and may request
that the Committee reconsider decisions of the General Counsel.  Claims for benefits under the Plan and
appeals of claim denials shall be in accordance with Sections 10 and
11.  Any interpretation by the Committee
shall be final and binding on the Participants.


 


4.                                       Participant
Deferral and Distribution Elections.


 


4.1                                 Execution
of Agreement.  A Director who wishes
to participate in the Plan must execute a Deferred Compensation Agreement
either (a) for newly eligible individuals, within 30 days after first
becoming eligible to participate in the Plan (to defer Compensation for the
remainder of that calendar year and subsequent years), or (b) prior to January 1
of the first calendar year for which the Deferred Compensation Agreement is to
be effective.


 


4.2                                 Deferral
Election.  Each Director shall have
the opportunity to elect the amount of his or her Compensation, to be earned in
calendar years subsequent to the date of election, which will be deferred in
accordance with this Plan, subject to limits specified by the Company.  The Compensation otherwise earned by a
Participant during each calendar year beginning after the date of the deferral
election shall be reduced by the amount elected to be deferred.  Elections to defer Compensation are
irrevocable except as otherwise provided in this Plan.  The amount of Compensation to be deferred
will be specified in the Deferred Compensation Agreement.


 


4.3                                 Change
of Deferral Election.


 


(a)                                  A
Participant who wishes to change an election to defer Compensation may do so at
any time by notifying the Committee in writing prior to January 1 of the
year for which the change in election is to be effective.


 


(b)                                 A
Participant who wishes to change an election to defer Compensation after January 1
of any calendar year for which the change in election is to be effective must
submit a written request to the Committee to revoke his or her deferral
election.  The request must state why the
Participant believes he or she should be permitted to revoke the prior
election.  Requests will be reviewed as
soon as administratively feasible and, if a change is permitted, the change
will be effective for all remaining pay periods following the date of the
determination.


 


4.4                                 Distribution
Election.  At the time a Participant first
elects to defer Compensation under Section 4.2, he or she shall elect a
distribution option for the Compensation so deferred, including gains or losses
thereon, as specified in the Deferred Compensation Agreement.  The distribution election shall apply to all
amounts


 


4





















 


in the Participant’s
Deferred Account under this Plan. 
Elections regarding distribution of Deferred Accounts under this Plan
are irrevocable except as otherwise provided in this Plan.  If a Participant does not make an election,
his or her account shall be paid out in quarterly installments over 15 years
beginning January 1 of the year following Termination.


 


4.5                                 Change
of Distribution Election. 
Participants who are active Directors may request, in writing, a change
in their distribution election.  The
changed distribution election must be one of the distribution options in the
original Deferred Compensation Agreement. 
The Committee must receive the request at least 12 months prior to the
date benefits are first scheduled to be paid under the original election and at
least 12 months before the commencement of payment under the changed
election.  The changed election must
defer payment for at least 5 years after the original election would have
commenced.  The request shall be approved
or denied at the Committee’s sole discretion. 
No change will be permitted that would allow a payment to be made
earlier than originally elected in the Deferred Compensation Agreement.  Requests that do not meet all of the
requirements of this Section will not be permitted.


 


4.6                                 Deferred
Account Allocations and Adjustments. 
The Company shall maintain a record of each Participant’s Deferred
Account balance and allocations.  Each
Participant’s Deferred Account shall be adjusted on a monthly basis to reflect imputed
interest.  Imputed interest will be
credited to a Participant’s account on the last day of each month.  Computation of imputed interest shall be at
the Company’s sole discretion.


 


5.                                       Distributions.


 


5.1                                 Distributions
in General.  The Company shall
distribute Participants’ Deferred Accounts as elected by each Participant in
the applicable Deferred Compensation Agreement, except as otherwise provided in
this Section 5.


 


5.2                                 Plan
Benefits Upon Termination.  Upon
Termination, a Participant shall be paid his or her account in the manner
elected by the Participant in the Deferred Compensation Agreement.  Unpaid balances under the installment
election continue to earn interest at the applicable imputed interest rate.


 


5.3                                 Distributions
Following Participant Death.  The
Company shall make all payments to the Participant, if living.  If a Participant dies either before benefit
payments have commenced under this Plan or after his or her benefits have
commenced but before his or her entire Deferred Account has been distributed, the
beneficiary designated pursuant to Section 6.2 shall receive any benefit
payments in accordance with the Deferred Compensation Agreement.  If no designation is in effect when any
benefits payable under this Plan become due, the beneficiary shall be the
spouse of the Participant, or if no spouse is then living, the Participant’s
estate.  In determining the existence or
identity of anyone entitled to a benefit payment, the Company may rely
conclusively upon information supplied by the Participant’s personal
representative, executor, or administrator. 
If a question arises as to the existence or identity of anyone entitled
to receive a benefit payment, or if a dispute arises with


 


5





















 


respect to any benefit
payment, then, notwithstanding the foregoing, the Company, in its sole discretion,
may cause the payment to be made to the Participant’s estate without liability
for any tax or other consequences that might flow therefrom or may take such
other action as the Company deems appropriate.


 


6.                                       Miscellaneous.


 


6.1                                 Assignability.  A Participant’s rights and interests under
the Plan may not be assigned or transferred except, in the event of the
Participant’s death, as described in Sections 5.3 and 6.2.


 


6.2                                 Designation
of Beneficiary.  A Participant shall
designate a beneficiary by filing a written notice of designation with the
Company in such form as the Company may prescribe, and the Participant may
change this designation from time to time by filing a new designation.  Each designation will revoke all prior
designations by the Participant and will be effective only when filed in
writing with the Company during the Participant’s lifetime.


 


6.3                                 Inability
to Locate  Participants or Beneficiaries.  Any communication, statement, or notice
addressed to a Participant or a beneficiary at his/her last mailing address as
shown on the Company’s records shall be binding on the Participant or
beneficiary for all purposes of the Plan. 
The Company shall not be obligated to search for any Participant or
beneficiary beyond sending a registered letter to the last known address.  If the Company notifies any Participant or
beneficiary that he or she is entitled to an amount under the Plan and the
Participant or beneficiary fails to claim such amount within 3 years thereafter,
then, except as otherwise required by law, the Company shall have the right to
direct that the amount payable shall be deemed to be a forfeiture, except that
the dollar amount of the forfeiture, unadjusted for imputed interest in the
interim, shall be paid by the Company if a claim for the benefit is
subsequently made by the Participant or beneficiary to whom it was
payable.  If a benefit payable to an
unlocated Participant or beneficiary is subject to escheat pursuant to
applicable state law, the Company shall not be liable to any person for any
payment made in accordance with such law.


 


6.4                                 Taxes.  The Company shall deduct from all payments
made under this Plan all applicable federal or state taxes required by law to
be withheld.


 


6.5                                 Form
of Communication.  Any election,
application, claim, notice or other communication required or permitted to be
made by a Participant to the Committee or the Company shall be made in writing
and in such form as the Company may prescribe. 
Such communication shall be effective upon receipt by the Company’s senior
human resources officer at 150 Pierce Road, Itasca, IL  60143.


 


6.5                                 Service
Providers.  The Company may, in its
sole discretion, retain one or more independent entities to provide services to
the Company in connection with the operation and administration of the
Plan.  Except as may be specifically
delegated or assigned to any such entity in writing, the Company shall retain
all discretionary authority under this Plan. 
No Participant or other person shall be a third party


 


6





















 


beneficiary with respect
to, or have any rights or recourse under, any contractual arrangement between
the Company and any such service provider.


 


7.                                       Amendment
and Termination.  The Company, acting
through its Board of Directors or any committee of the Board of Directors, may,
at its sole discretion, amend or terminate the Plan at any time, provided that
the amendment or termination shall not adversely affect the vested or accrued
rights or benefits of any Participant without the Participant’s prior consent.


 


8.                                       Unsecured
General Creditor.  Except as provided
in Section 9, Participants and their beneficiaries, heirs, successors, and
assigns shall have no legal or equitable rights, interest, or claims in any
property or assets of the Company.  The
assets of the Company shall not be held under any trust for the benefit of
Participants, their beneficiaries, heirs, successors, or assigns, or held in
any way as collateral security for the fulfilling of the obligations of the
Company under this Plan.  Any and all
Company assets shall be, and remain, the general, unpledged, unrestricted
assets of the Company.  The Company’s
obligation under the Plan shall be an unfunded and unsecured promise of the
Company to pay money in the future.


 


9.                                       Deferred
Compensation and Benefits Trust.  Upon
the occurrence of a Change in Control of the Company or at any time thereafter,
the Company, in its sole discretion, may transfer to the DCB Trust cash,
marketable securities, or other property acceptable to the trustee to pay the
Company’s obligations under this Plan in whole or in part (the “Funding Amount”).  Any cash, marketable securities, and other
property so transferred shall be held, managed, and disbursed by the trustee
subject to and in accordance with the terms of the DCB Trust.  In addition, from time to time, the Company
may make additional transfers of cash, marketable securities, or other property
acceptable to the trustee as desired by the Company in its sole discretion to
maintain or increase the Funding Amount with respect to this Plan.  The assets of the DCB Trust, if any, shall be
used to pay benefits under this Plan, except to the extent the Company pays
such benefits.  The Company and any
successor shall continue to be liable for the ultimate payment of those
benefits.


 


10.                                 Claims
Procedure.  Claims for benefits under
the Plan shall be filed in writing, within 90 days after the event giving
rise to a claim, with the Company’s senior human resources officer (the “Manager”),
who shall have absolute discretion to interpret and apply the Plan, evaluate
the facts and circumstances, and make a determination with respect to the claim
in the name and on behalf of the Committee. 
The claim shall include a statement of all relevant facts and copies of
all documents, materials, or other evidence that the claimant believes relevant
to the claim.  The Company shall notify
the claimant in writing of the disposition of the claim within 90 days
after the claim is filed.  The Manager,
in his or her sole discretion, may extend this 90-day period an additional 90 days
by providing written notice of the extension to the claimant before the
original 90-day period expires.  If the
claim is denied, the specific reasons for the denial shall be set forth in
writing, pertinent provisions of the Plan shall be cited and, where
appropriate, an explanation as to how the claimant may perfect the claim or
submit the claim for further review will be provided.


 


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11.                                 Claims
Review Procedure.  Any Participant,
former Participant, or beneficiary of either, who has been denied a benefit
claim, shall be entitled, upon written request, to a review of the denied
claim.  The request, together with a
written statement of the claimant’s position, must be filed no later than
60 days after receiving the written notice of denial provided for in Section 10
with the Manager, who shall promptly inform the Committee.  The Committee shall review the claim and
notify the claimant, in writing, of its decision within 60 days after
receiving the request for review.  The
Committee, in its discretion, may extend this 60-day period an additional
60 days by providing written notice of the extension to the claimant
before the original 60-day period expires.  The Committee’s written decision shall state
the facts and Plan provisions upon which the decision is based and shall be
final and binding on all parties.


 


12.                                 Lawsuits,
Jurisdiction, and Venue.  No lawsuit
claiming entitlement to benefits under this Plan may be filed prior to
exhausting the claims and claims review procedures described in Sections 10 and
11.  Any such lawsuit must be initiated
no later than (a) one year after the event(s) giving rise to the claim
occurred, or (b) 60 days after a final written decision was provided to the
claimant under Section 11, whichever is sooner.  Any legal action involving benefits claimed
or legal obligations relating to or arising under this Plan may be filed only
in Federal District Court in the city of Itasca, Illinois.  Federal law shall be applied in the
interpretation and application of this Plan and the resolution of any legal
action.  To the extent not preempted by
federal law, the laws of the state of Delaware shall apply.


 


13.                                 Effective
Date of Plan.  This Plan shall become
effective January 1, 2005.


 


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EXHIBIT A


 


IMPUTED INTEREST


 


Deferred Accounts shall
be credited with imputed interest equal to an annualized rate of interest equal
to 130% of Moody’s Composite Average of Yields on Corporate Bonds (“Moody’s”)
as determined each month from Moody’s Bond Record (as published by Moody’s
Investor’s Service, Inc.) or any successor thereto, or, if such monthly report
is no longer published, a substantially similar rate determined by the Company,
in its sole discretion.  Moody’s, for
purposes of this Plan, shall be based for any given month on such published
rate for the immediately preceding calendar month.


 


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APPENDIX A


OfficeMax
Incorporated


Form of
Director Compensation Election Agreement


 


This agreement
constitutes my election, if any, under OfficeMax’s Director Stock Compensation
Plan and 2005 Directors Deferred Compensation Plan and is subject to the
provisions of these plans.  I agree that
my requests to receive compensation in the form of a stock option and/or to
defer cash compensation into the deferred compensation plan are irrevocable by
me for compensation to be earned in 200  .


 


I wish to receive my cash
compensation (retainer and meeting fees) as follows:


 


	
   

  	
   

  	
  200   ELECTIONS

  	
   

  	
  NEW

  200   ELECTIONS

  	
   

  
	
  Deep
  Discount Stock Options under the Director Stock Compensation Plan

  	
   

  	
   

  	
  %

  	
   

  	
  %

  
	
  Directors
  Deferred Compensation Plan*

  	
   

  	
   

  	
  %

  	
   

  	
  %

  
	
  Cash

  	
   

  	
   

  	
  %

  	
   

  	
  %

  
	
   

  	
   

  	
  100

  	
  %

  	
  100

  	
  %

  



 










*The
dollar value of the percent you defer must be at least $5,000 per year. OfficeMax
believes, but does not guarantee, that a deferral election made under the terms
of the plan is effective to defer the receipt of taxable income. You are
advised to consult with your attorney or accountant regarding the federal and
state tax law implications of this deferral.


 


	
  Date:

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Director

  	
   

  



 


This
form must be returned before December 31, 200  , to:


 


Matthew R. Broad


Executive Vice
President, General Counsel and Corporate Secretary


OfficeMax
Incorporated


150 Pierce Rd.


Itasca, IL 60143


 


FAX: 208-384-7945


 


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OfficeMax
Incorporated


Form of Director Deferred Compensation
Distribution Election Agreement


 


THIS AGREEMENT dated                 ,
is between OFFICEMAX INCORPORATED (“the Company”) and                       
(the “Director”). Director is a Participant in the Company’s 2005 Directors
Deferred Compensation Plan (the “Plan”), which is incorporated into this
Agreement.


 


The Company and the
Director agree to the following distribution of Director’s account balance
under the Plan:


 


Distribution
Election


 


This election will apply to ALL your
deferred compensation under the Plan.


 


1.                                       The
Director elects the following form of distribution
of his or her Deferred Account balance:


	
  o

  	
  A.

  	
  Lump-sum payment.

  
	
  o

  	
  B.

  	
  Quarterly installment
  payments (estimated to be level payments) over a period of
                      
  years (not to exceed 15 years).

  
	
  o

  	
  C.

  	
  As set forth in Exhibit
  A (alternative distribution plan not to exceed 15 years).

  



 


2.                                       The
Director elects the following distribution beginning
date:


	
  o

  	
  A.

  	
  January 1 of the
  year following Termination.

  
	
  o

  	
  B.

  	
  The later of
  age 55 or Termination.

  
	
  o

  	
  C.

  	
  The later of
  age 65 or Termination.

  
	
  o

  	
  D.

  	
  The later of
                             (date)
  or his or her Normal Retirement Date.

  



 


3.                                       If
the Director dies before his or her distributions
from the Plan begin, the Company will pay the Director’s designated beneficiary
the Deferred Account balance as a (choose one):


	
  o

  	
  A.

  	
  Lump-sum payment.

  
	
  o

  	
  B.

  	
  Quarterly installment
  payments over a period of
                
  years (not to exceed 15 years).

  
	
  o

  	
  C.

  	
  As set forth in Exhibit
  A (alternative distribution plan not to exceed 15 years).

  



 


4.                                       If
the Director dies after installment payments have
begun, the Company will pay the Director’s designated beneficiary (choose one):


	
  o

  	
  A.

  	
  Lump sum of the
  remaining Deferred Account balance.

  
	
  o

  	
  B.

  	
  The remaining
  installment payments, if any.

  



 


IN WITNESS WHEREOF, the
parties have entered into this Agreement on the day first written above.


 


	
  OFFICEMAX INCORPORATED

  	
  DIRECTOR

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  	
   

  
						



 


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